Iraq begins crude exports from Kurdistan

03 February 2011

Norway’s DNO tests Tawke field production at 10,000 b/d

Iraq has resumed crude oil exports from the Kurdistan region at more than 10,000 barrels a day (b/d), following production tests at the Tawke field.

The developer of the field, Norway’s DNO announced in a 3 February statement, that it had begun production tests at the field in the Dohuk province.

The technical tests are being carried out in coordination with the Kurdistan Regional Government (KRG) and state-owned North Oil Company and will see production ramped up to 50,000 b/d over the next week.

Sources close to the state-owned North Oil Company (NOC) say 10,500 b/d of oil from the Tawke and Taq-Taq fields have been sent to the Kirkuk pipeline, which runs to Ceyhan in Turkey. Taq-Taq is being developed Turkey’s Genel Enerji in consortium with China’s Sinopec.

Crude exports earned Iraq $4.6bn in 2010. Exports from Kurdish region began 2009, but were halted a few months later due to a dispute with the Oil Ministry over how to pay the international oil companies developing the fields (MEED 27:12:10).

Sources in Irbil say the region has the capacity to export more than 100,000 b/d of crude oil, a figure that was expected to rise to 250,000 b/d in the first half of 2010. Talks between Irbil and Baghdad over the issue were held in early 2010 to resolve payment.

The Oil Ministry says it is the responsibility of the KRG to pay the developers from its regional budget, while the KRG argues that the central government must make the payments.

There is also the issue of distributing oil revenues. According to the proposed budget, the KRG must export 150,000 b/d, but faces a reduction in 17 per cent allocation of government revenues if it fails to do so. This has led to walkouts from Kurdish parties, but the new deal appears to have brought the export figure down to a more achievable 100,000 b/d.

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